Home Business News Why the NNPC wants $5 billion advance payments for Nigeria’s crude

Why the NNPC wants $5 billion advance payments for Nigeria’s crude

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The Nigerian National Petroleum Corporation (NNPC) has begun shortlisting traders who will lend the corporation between $3.5-$5 billion. Proceeds from the loan will be used to fund oil and gas upstream projects, while the repayment will be  in terms of crude oil.  Notable names on the list include oil traders Vitol and Trafigura. Standard Chartered is serving as advisers to the transaction.

The corporation had recently been in a war of words with the Minister of State for Petroleum, Ibe Kachikwu over an alleged lack of due process in the award of contracts. In its rebuttal, the NNPC stated that it had merely shortlisted prospective off takers of crude oil and suppliers of petroleum products under agreed terms.  Kachikwu  has since recanted his statement, sticking to only a lack of due process in the NNPC’s operations.

The NNPC was established on April 1, 1977 and In addition to its exploration activities, the Corporation also has  interests in refining, petrochemicals and products transportation as well as marketing. In addition, the corporation also owns refineries in Warri, Port Harcourt and Kaduna.

Vitol, was founded in 1966 by Jacques Dieteger and Henk Vietor and is a global energy and commodities trading company.

Trafigura is a multinational commodity trading company founded by Claude Dauphin and Eric de Turckheim in 1993. The company trades in base metals and energy, including oil. It is the world’s second largest private oil trader after Vitol and the world’s largest private metals trader.

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